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Vantage Hospitality Group, Inc. v. Q Ill Development, LLC

Court of Appeals of Illinois, Fourth District

December 28, 2016

VANTAGE HOSPITALITY GROUP, INC., Plaintiff-Appellee,
v.
Q ILL DEVELOPMENT, LLC, d/b/a Shepherd's Inn, Defendant-Appellant.

         Appeal from Circuit Court of Adams County No. 14LM32 Honorable Debra L. Wellborn, Judge Presiding.

          JUSTICE STEIGMANN delivered the judgment of the court, with opinion. Justices Harris and Appleton concurred in the judgment and opinion.

          OPINION

          STEIGMANN, JUSTICE

         ¶ 1 In 2006, plaintiff, Vantage Hospitality Group, Inc. (Vantage), and defendant, Q Ill. Development, LLC, d/b/a Shepherd's Inn (QIll), entered into a franchise agreement titled "America's Best Value Inn Brand Membership Application and Agreement" (Agreement), pursuant to which QIll could use the America's Best Value Inn brand to market and operate its hotel in Quincy, Illinois. The Agreement included an area of protection clause (Area of Protection), which limited Vantage's ability to execute new franchise agreements with other hotels in the Quincy area.

         ¶ 2 In February 2014, Vantage filed a complaint alleging that QIll had failed to pay its required monthly dues under the Agreement. In response, QIll filed an answer and a counterclaim, alleging that Vantage had breached the Agreement by licensing a hotel in Hannibal, Missouri, contrary to the Area of Protection provision.

         ¶ 3 In October 2015, Vantage filed a motion to dismiss QIll's counterclaim pursuant to section 2-619(a)(9) of the Code of Civil Procedure (Code) (735 ILCS 5/2-619(a)(9) (West 2014)). Attached to that motion were (1) a document titled "Special Considerations Addendum" (Addendum) and (2) an affidavit of Jordan Langlois, the vice president of brand management for Vantage. In its motion to dismiss, Vantage argued that QIll had breached the Addendum beginning in December 2006 by failing to attend mandatory annual meetings, a fact asserted by Langlois in his affidavit. Vantage argued further that QIll's breach of the Addendum voided any Area of Protection clause, meaning that Vantage's licensing of the Hannibal hotel did not constitute a breach. The trial court granted Vantage's motion to dismiss.

         ¶ 4 In December 2015, QIll filed a motion to reconsider the trial court's decision to dismiss QIll's counterclaim. In that motion, QIll argued, in part, that Langlois's affidavit failed on multiple grounds to comply with Illinois Supreme Court Rule 191(a) (eff. Jan. 4, 2013). After a hearing on the motion to reconsider, the court struck part of Langlois's affidavit but adhered to its decision to dismiss QIll's counterclaim. QIll appeals. We affirm.

         ¶ 5 I. BACKGROUND

         ¶ 6 A. The Agreement

         ¶ 7 On February 2, 2006, Vantage and QIll executed the Agreement that allowed QIll to use the America's Best Value Inn brand to style and market its hotel in Quincy, Illinois. The Agreement also included an Area of Protection clause, which provided the following: "[Vantage] shall not allow its name or offer membership to any property within 40 miles of Quincy. Hannibal, MO, will be allowed only on applicants with a new construction or major renovation."

         ¶ 8 B. Vantage's Complaint

         ¶ 9 In February 2014, Vantage filed a complaint alleging that QIll had failed to pay its monthly dues as required by the Agreement. Vantage requested $34, 550 in damages, plus court costs. Attached to the complaint was the Agreement, among other attachments.

         ¶ 10 C. QIll's Counterclaim

         ¶ 11 In May 2014, QIll filed an answer and a one-count counterclaim alleging breach of contract. Specifically, QIll alleged that Vantage violated the Agreement by licensing a hotel in Hannibal, Missouri, thereby violating the Area of Protection clause. QIll sought monetary damages and attorney fees as a remedy for Vantage's alleged breach of the Agreement. In June 2014, Vantage filed an answer to QIll's counterclaim.

         ¶ 12 D. Vantage's Section 2-619 Motion To Dismiss QIll's Counterclaim

         ¶ 13 In October 2015, Vantage filed, under section 2-619(a)(9) of the Code, a motion to dismiss QIll's counterclaim. In support of its motion, Vantage attached (1) the affidavit of Jordan Langlois, Vantage's Vice-President of Brand Management, and (2) the Addendum, which was executed by representatives of Vantage and QIll on February 23, 2006, three weeks after Vantage and QIll initially executed the Agreement. The Addendum stated that it was "incorporated into the [Agreement]." The Addendum included the following new Area of Protection provision:

"[Vantage] agrees not to establish, or, or [sic] allow to exist, any other [Vantage] properties, within a 10 mile radius of Quincy, IL, will also include a right of first refusal for a radius of 40 miles, from Quincy IL. Hannibal, MO will be allowed only on properties under new construction or major renovations, for the period of the contract."

         ¶ 14 The Addendum also included a section titled "Conditions of Area of Protection." That section included the following relevant provision: QIll "shall send at least one property rep- resentative to the Annual conference every year for educational training, Brand initiatives, and overall ROI analysis" (Annual Meeting Provision). The Addendum concluded with the following language: "The terms and conditions of this Addendum shall be controlling over any conflicting terms and conditions contained in the [Agreement] to which this Addendum is attached and made a part thereof."

         ¶ 15 Vantage asserted that QIll violated the Annual Meeting Provision of the Adden- dum, as shown in Langlois's affidavit, which stated, in pertinent part, the following:

"QIll *** failed to ever, during the entire term of the contract, to [sic] send at least one of its representatives to the annual [Vantage] training conferences held in Las Vegas, Nevada[, ] in December of 2006 through 2012 ***."

          ¶ 16 Langlois's Affidavit concluded with the following two paragraphs:

"9. This affidavit is given in support of Plaintiff's Motion to Dismiss the Defendant's Counterclaim ***.
10. The foregoing is true and correct to the best of my personal knowledge, and I could competently testify in open court if called upon to do so, as to the facts set forth herein."

         ¶ 17 Vantage argued in its motion to dismiss that QIll's breach of the Annual Meeting Provision of the Addendum voided the limitations placed on Vantage by the Area of Protection clause of the Addendum. Vantage concluded that QIll's breach constituted a "sufficient affirmative matter that ...


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